Employer of Record in United Arab Emirates

An Employer of Record (EOR) in the United Arab Emirates is a company that legally hires employees on your behalf. This means you can build a team in the UAE without setting up a local business entity. The EOR takes care of the complex tasks like payroll, taxes, benefits, and compliance with UAE labor laws. You maintain control over your employees' day-to-day work and responsibilities. Rivermate is an EOR provider that can help you with this process. You can learn more at https://rivermate.com/employer-of-record.

How an Employer of Record (EOR) Works in United Arab Emirates

Using an EOR in the UAE simplifies the process of hiring and managing a team. Here is a step-by-step look at how it works:

1. Agreement: You start by signing an agreement with the EOR. This outlines the services they will provide and the responsibilities of each party.
2. Onboarding: The EOR legally hires your chosen candidates. They handle all the necessary paperwork, including employment contracts that comply with UAE labor laws.
3. Visas and Work Permits: The EOR manages the entire visa and work permit application process for your employees. This includes residency permits and other necessary documentation.
4. Payroll and Benefits: The EOR processes your employees' salaries, deductions, and benefits. They ensure timely payments and adherence to local regulations.
5. Compliance: The EOR ensures that all employment practices are in line with UAE labor laws. This includes managing contracts, working hours, and leave policies.
6. HR Support: The EOR provides ongoing human resources support. They handle employee queries and other administrative tasks.

Benefits of Using an EOR for Hiring in United Arab Emirates

Partnering with an EOR in the UAE offers several advantages. It allows you to enter the market quickly and efficiently, without the need to establish a legal entity. This saves you time and money. An EOR also reduces the administrative burden on your company, allowing you to focus on your core business operations.

Here are some of the key benefits:

• Faster Market Entry: You can hire employees and start operations in the UAE within days, rather than the months it can take to set up a local company.
• Compliance Assurance: EORs have in-depth knowledge of UAE labor laws, which helps you avoid legal issues and penalties.
• Cost Savings: Using an EOR eliminates the significant costs associated with establishing a legal entity in the UAE.
• Simplified HR and Payroll: An EOR handles all the administrative tasks of payroll, benefits, and HR, freeing up your internal resources.
• Access to Local Expertise: EORs provide valuable insights into the local job market and employment practices.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in United Arab Emirates includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in United Arab Emirates.

Hiring in the United Arab Emirates means tapping into a diverse and global talent pool. The UAE's economy is strong and has grown rapidly, attracting professionals from all over the world. To hire, your company generally needs to be legally registered in the UAE to sponsor work visas. The process involves specific documentation and adherence to the country's labor laws, which aim to protect workers and provide clear expectations for both you and your employees.

Employment contracts & must-have clauses

When you hire an employee in the UAE, a formal employment contract is required. All contracts must be for a fixed term.

Your contracts must be in writing and in Arabic. If you provide a translation in another language, the Arabic version is the one that holds up legally.

Here are the essential clauses to include in your employment contracts:

• Job Title and Responsibilities: Clearly define the employee's role and duties.
• Compensation and Benefits: Specify the salary, including base pay and any allowances.
• Working Hours: Outline the expected working hours.
• Leave Entitlements: Detail annual leave and other types of leave.
• Termination Clauses: Include notice periods and conditions for ending the contract.
• Confidentiality and Data Protection: Protect your company's sensitive information.
• Non-Compete Clauses: If applicable, define the scope, duration, and geographical limits of any non-compete agreement.

Probation periods

In the UAE, you can place a new employee on a probation period to assess their suitability for the role.

• The probation period cannot be longer than six months.
• You can only place an employee on probation once.
• During probation, you must give at least 14 days' written notice to terminate the employment contract.
• If an employee wants to resign during probation to work for another UAE employer, they must provide 30 days' notice. If they plan to leave the country, a 14-day notice is required.

Working hours & overtime

Standard working hours in the UAE are straightforward.

• The maximum is 8 hours per day or 48 hours per week.
• During the holy month of Ramadan, daily working hours are reduced by two hours for all employees.
• You can ask an employee to work up to two hours of overtime per day.

Overtime pay is calculated based on the employee's basic salary:

Public & regional holidays

Your employees are entitled to paid time off for public holidays. The official public holidays in the UAE for 2025 are:

Note: Islamic holiday dates are subject to moon sightings and may vary.

Hiring contractors in United Arab Emirates

You can hire independent contractors for specialized projects. However, it is important to understand the difference between a contractor and an employee to avoid misclassification.

An independent contractor:

• Has freedom over how, when, and where they work.
• Can work for multiple clients at once.
• Uses their own tools and equipment.
• Is not entitled to employee benefits like paid leave and overtime.

Misclassifying an employee as a contractor can lead to fines, back payments for social security, and other penalties. An Employer of Record (EOR) can help you mitigate this risk. An EOR allows you to hire talent in the UAE compliantly without setting up a local entity. We handle the complexities of payroll, benefits, and legal compliance, ensuring your workers are classified correctly according to UAE labor law. This lets you focus on growing your business while we take care of the administrative burdens.

In the United Arab Emirates, your payroll and employee compensation are governed by the UAE Labour Law. You need to follow specific rules for paying your team, even though the system offers some flexibility. A key part of this is the Wage Protection System (WPS), an electronic transfer system that ensures you pay your employees on time.

Payroll cycles & wage structure

You should pay your employees monthly. If your employment contract doesn't specify a pay period, you must pay wages at least once a month. You are considered in default if you don't pay wages within 15 days of the due date.

While there are no mandatory components for a salary, a typical wage structure includes:

• Basic Salary: This is the core amount agreed upon in the employment contract. It's the basis for calculating overtime and end-of-service benefits.
• Allowances: It is common to offer allowances for housing and transportation. You can also include other allowances for things like education or utilities.

Overtime & minimums

The standard work week is 48 hours, typically eight hours per day. Any time worked beyond these hours is overtime.

• Regular Overtime: Pay is 125% of the employee's regular wage.
• Night Overtime: For hours worked between 9 p.m. and 4 a.m., the rate increases to a 150% premium.
• Public Holiday Overtime: Work on a public holiday is compensated at 150% to 200% of the regular wage.

There is no national minimum wage for expatriate employees in the UAE. However, wages must be fair and align with industry standards. For UAE nationals, there are minimum wage requirements based on their education level.

Employer taxes and contributions

As an employer, you are responsible for a few key contributions for your UAE and GCC national employees.

Employee taxes and deductions

One of the main attractions of working in the UAE is the absence of personal income tax. However, there are pension contributions for certain employees.

In the United Arab Emirates, the approach to employee benefits and leave is generous, aiming to attract and retain talent from around the world. The system provides a solid foundation of mandatory protections combined with appealing optional perks. This creates a competitive job market where both employees and employers can find valuable opportunities.

Statutory leave

The UAE Labour Law outlines several types of mandatory leave for employees.

• Annual Leave: After one year of service, you are entitled to 30 days of annual leave. If you have worked for more than six months but less than a year, you get two days of leave for each month worked.
• Maternity Leave: Female employees receive 60 days of maternity leave. The first 45 days are fully paid, and the next 15 days are at half pay.
• Paternity Leave: An employee whose wife has a newborn is entitled to 5 working days of parental leave. This can be taken consecutively or at different times within the first six months of the baby's birth.
• Sick Leave: Once you complete your probationary period, you are entitled to a maximum of 90 days of sick leave per year. The first 15 days are fully paid, the next 30 are at half pay, and the final 45 days are unpaid.
• Other Leave: The law also provides for other types of leave, such as bereavement leave of up to 5 days and study leave of 10 days.

Public holidays & regional holidays

The UAE government announces public holidays each year. These are generally the same for both public and private sector employees. If you have to work on a public holiday, your employer must give you another day off or pay you your normal wage plus a bonus of 50%.

Typical supplemental benefits

Employers in the UAE must provide certain benefits by law. Many companies offer additional perks to attract top talent.

How an EOR can help with setting up benefits

Setting up a compliant and competitive benefits package in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR already has a legal entity established in the UAE. This means you don't have to go through the process of setting one up yourself. They understand the local labor laws and statutory requirements for benefits.

Here is how an EOR can help:

• Ensure Compliance: An EOR ensures your benefits package meets all legal requirements under UAE Labour Law.
• Offer Competitive Packages: They have insight into the local market and can help you create a benefits package that is attractive to top talent.
• Manage Administration: The EOR handles the day-to-day administration of benefits, from enrollment to managing leave requests.
• Simplify Payroll: All benefits and compensation are managed through a single, streamlined payroll process.

Using an EOR allows you to hire and onboard employees in the UAE quickly and efficiently, without the administrative burden of managing benefits and payroll yourself.

When an employee leaves your company in the United Arab Emirates, you need to follow a clear process. This process, known as termination and offboarding, is guided by the UAE's Labour Law. It involves specific steps from giving notice to calculating the final payment. Managing this correctly protects your business from legal issues and helps maintain a good relationship with the departing employee. The process ensures everything is handled fairly and according to the law.

Notice periods

When you or your employee decides to end the employment contract, a written notice is required. The length of this notice period is usually stated in the employment contract.

According to UAE Labour Law, the notice period must be:

• At least 30 days.
• A maximum of 90 days.

During the probationary period, a minimum of 14 days' written notice is needed for termination. Both you and the employee can agree to a longer notice period in the contract. If one party fails to provide the required notice, they must pay the other party compensation equal to the salary for the notice period.

Severance pay

In the UAE, severance pay is known as an end-of-service gratuity. An employee is entitled to this payment after completing at least one continuous year of service. The amount is calculated based on the employee's basic salary and their length of service.

Here is how you calculate severance pay:

• For the first five years of service: 21 days of basic salary for each year.
• For each additional year of service after five years: 30 days of basic salary for each year.

The total severance pay cannot exceed the amount of two years' total salary. You must pay all final settlement dues, including the end-of-service gratuity, within 14 days of the employee's last day of work.

How Rivermate handles compliant exits

When you partner with an Employer of Record like Rivermate, we manage the entire offboarding process for you. We make sure every step is compliant with UAE Labour Law.

Here’s how we simplify employee exits:

• Clear Communication: We handle the communication with the departing employee, ensuring all information is delivered clearly and professionally.
• Accurate Calculations: We calculate the final settlement, including severance pay and any other outstanding payments, to ensure accuracy and compliance.
• Legal Compliance: We manage all the necessary legal paperwork and submissions to the Ministry of Human Resources and Emiratisation (MOHRE). This includes canceling the employee's work permit and visa.
• Smooth Transition: We create a structured offboarding plan that includes asset collection and knowledge transfer, making the process smooth for both you and the employee.

By handling these complexities, we help you avoid legal risks and ensure a respectful and compliant exit for your employees.

Navigating the visa and work permit process in the United Arab Emirates can seem complex. Any foreign national who wants to work in the UAE needs a valid work permit and a residence visa. Typically, an employer sponsors these documents. This means you must have a job offer from a company that is legally set up in the UAE to start the application process. The standard work visa is the most common route for foreign nationals and is usually valid for one to two years.

Employment visas & sponsorship realities

An Employer of Record (EOR) can be a practical solution for hiring in the UAE, especially if your company doesn't have a legal entity in the country. An EOR can legally employ staff on your behalf, handling payroll, compliance, and visa sponsorship.

Here are some key points about EOR sponsorship:

• What an EOR can do: An EOR acts as the legal employer for your workers in the UAE. This allows you to hire talent without the cost and complexity of setting up a local entity. They manage the visa application process and ensure everything is compliant with local labor laws.
• What an EOR can't do: There can be limitations to EOR sponsorship. For example, some countries do not legally permit an EOR to sponsor a visa. Also, companies may face restrictions like visa quotas, which can limit the number of employees they can sponsor.
• Practical routes: Using an EOR is a fast and straightforward way to bring on talent. It's a flexible, low-risk solution for businesses looking to test new markets or expand their teams across borders.

Business travel compliance

For short-term visits to the UAE for business purposes, you'll need a visit visa. Working on a tourist or visit visa is illegal. There are a few options for business travel:

• Single-entry visa: This visa is suitable for a one-time business trip to attend meetings, conferences, or explore investment opportunities. You can get a single-entry visa for 60, 90, or 120 days.
• Multiple-entry visa: If you plan to visit the UAE frequently for business, a multiple-entry visa is a better option. This visa allows you to enter the UAE multiple times and stay for up to 90 days per visit.
• Visa on arrival: Citizens of many countries can get a visa on arrival. The length of stay varies from 30 to 180 days depending on your nationality.

To apply for a business visa, you will generally need:

• A valid passport with at least six months of validity.
• A confirmed return ticket.
• Proof of sufficient funds to support your stay.
• An invitation letter from a UAE sponsor.